Wednesday, August 22, 2007

To hell and back

Howard Lutnick rebuilt Cantor Fitzgerald against the odds. But he will struggle to reconquer his industry

SITTING in his office, Howard Lutnick is repeatedly interrupted by the sound of hammering in the room above. “If I tell them they can't work by day, they'll do it at night and charge me double,” he shrugs.

The comment suggests that the boss and controlling partner of Cantor Fitzgerald has not lost his keen eye for the bottom line. It also serves as a reminder that, after six years of heroic effort, reconstruction of the famous bond house he has run since 1991 is still incomplete.

However uncomfortable their plight, moneymen caught in today's credit squeeze would surely give thanks that they were not in Mr Lutnick's shoes in the weeks after September 11th 2001. Cantor lost two-thirds of its New York employees in the terrorist attacks that day, making it by far the worst-hit financial firm.

Overnight it went from being the king of the inter-dealer brokers—who act as go-betweens for banks that buy and sell bonds, foreign exchange, derivatives and so on—to nowhere. What followed was nothing short of miraculous. Mr Lutnick, who survived only because he had been taking his son to kindergarten, got the firm running again within two days. It even made a profit the next quarter.

Cantor's journey back up the industry rankings has been less dramatic, but no less strenuous. Today it is once again among the leaders, but still behind Tullett Prebon and the industry leader, ICAP, both based in London....